Protein-tyrosine phosphatase enzymes (PTPases) have been postulated to play an important role in the cellular regulation of insulin action by dephosphorylating the active (autophosphorylated) form of the insulin receptor and attenuating its tyrosyl kinase activity. The goals of this project are to identify and characterize the major PTPase(s) in rat liver and muscle that are active towards the insulin receptor in vitro and to examine their potential physiological role in the regulation of insulin action when expressed in insulin-sensitive cultured cells. The following specific aims are proposed: 1) Complete my preliminary cDNA cloning and sequence analysis of two transmembrane rat liver PTPase homologs that I have shown to have activity against the insulin receptor in vitro; identify one major rat skeletal muscle PTPase by amplification of cDNA with degenerate oligonucleotide primers to conserved PTPase residues; isolate the cDNA coding region for PTPase 1B, which is also expressed in insulin- sensitive tissues; 2) Characterize the physical and functional properties of the cloned PTPase enzymes. Antibodies will be produced from deduced peptide sequences and bacterially-expressed cDNA segments and used for immunoblot analysis. PTPase activity towards the insulin receptor and other substrates will be assessed using the recombinant PTPase catalytic domains as well as the native individual PTPases purified from tissue fractions by immunoadsorption techniques, and 3) Evaluate the potential physiological role of the cloned PTPases by transfecting full-length PTPase cDNAs in constitutive and inducible expression vectors into insulin- sensitive cultured cells. Effects on insulin receptor phosphorylation as well as several metabolic actions of insulin will be characterized. In addition to an overall understanding of this important system of cellular regulation, this project may ultimately provide a novel approach to the therapy of disorders with defective activity of the insulin receptor kinase; e.g., specific agents that modulate the activity of PTPases acting on the insulin receptor or its endogenous substrates may enhance insulin action in human disease states with insulin resistance such as common forms of non-insulin-dependent diabetes mellitus.